As vice president and chief technology officer at Qwest, Pieter Poll faces the challenge of moving the carrier with a 14-state footprint into the competitive fray with much larger rivals such as AT&T and Verizon.
A veteran of AT&T’s Bell Labs, where he helped develop the network evolution plans for the AT&T long-distance network, Poll joined the former U.S. West Advanced Technologies organization in 1994 to develop switching and network intelligence evolution plans. After a brief stint at Mahi Networks, Poll rejoined Qwest in 2004. eWEEK Senior Writer Roy Mark recently talked with Poll about Qwest’s strategic plans.
Comcast has taken a public and media beating over its handling of peer-to-peer traffic. Is Qwest facing the same sort of P2P problems in network management?
I think all broadband providers are facing problems in terms of handling the growth. It’s not an immediate problem, but it’s really more of a trend. You look at Internet traffic on our network, and it typically doubles every 15 months. On a per-user basis, each individual user will generate 40 percent more uploads and downloads per year compared with the previous year at essentially the same revenue number.
It doesn’t take a rocket scientist to figure out that we have to bring down the cost of transporting IP 40 percent year over year, or it’s like you are in a room and the water level is slowly going up. You only have a finite amount of time.
That said, Qwest would disagree with Comcast that you would address any one specific traffic type. At Qwest, we look at the total 1 percent or so of DSL subscribers that are driving about 20 percent of the total traffic on the network. AT&T’s CTO [John Donovan] made a claim a few weeks ago with a number that is almost exactly the same.
It just shows you that it is a typical behavior around the industry. I would expect Comcast’s numbers run about the same.
We fundamentally believe we have the right to manage our network, but we do not believe the way to do that is to pick on any one application. If you look at the top users, P2P is a component of that, but you look at people using Web cams on a 24/7 basis or generating Internet multiple radio feeds [and see they] also generate a significant amount of transfer.
To give you a comparison point, the medium usage of Qwest broadband [subscribers] is about 1.5 gigs of transfer per month. Toward the extreme end, we have a customer that is hitting at a terabyte. That shows you the range of what you’ve got.
So how are you dealing with this growth in network traffic?
There are two things that I’ll point out. First of all, Qwest fundamentally believes that those that are toward the higher end [of broadband consumption] are very much showing us how the Internet is going to go. We are not about going in and punishing that customer segment.
What we’re doing is investing in growth in our network, and we’re doing what we can to make that growth very cost effective. We have an acceptable use policy which states that Qwest reserves the right to manage our network, and by “manage our network” I would say, toward the very top 1 percent, we may choose to take some action. I want to stress this: We are not currently going in and restricting traffic or restricting certain traffic types on our network.
Do you currently have any pricing plans such as usage caps?
We do not have any plans at this point. As I said, we fundamentally-and I think this is in line with what the FCC [Federal Communications Commission] is feeling about broadband networks-reserve our right to manage the network. I think if you look at the growth, it’s clear all carriers will have to perform greater levels of management in the future.
Qwests Business Growth
Overall for Qwest, where is your business growth going to come from during the next 24 months?
In our business markets groups, we are all about increasing our market share. To your readers, I would point out Qwest is a very viable nationwide company on the business side. It is not an entity limited to the 14 states where we are known as the incumbent local carrier.
You’ve said 50 percent of your business customers are outside your 14-state footprint. What services are they taking?
Across the business markets group, certainly, you have a lot of people taking traditional long-distance voice services. More often than not … we see people taking voice and IP and local dial tone from us outside the 14 states. We offer business voice and IP nationwide. And then, of course, IP and Ethernet are huge draws.
This is a huge opportunity for Qwest as companies begin transitioning from legacy Layer 2 services to MPLS [multiprotocol label switching]-based services. Business users are taking a new look at their networks. That’s an opportunity for us to come in and take market share.
What about your wholesale channel?
In our wholesale channel, we are increasing revenue, but we’re increasing the revenue that is profitable. In other words, we are interested in a wholesale business that has a margin associated with it and not just the revenue to say you have revenue coming through the door.
How’s your retail consumer market shaping up?
That’s all about taking market share in the area of broadband. Qwest is very proud that we have got our DSL penetration to 85 percent of all the phones inside our 14-state footprint. We’ve been very successful with solutions to be able to push broadband more into rural areas. We’re just now getting to the point where the affordability is getting more difficult on a per-home-pass basis [the cost to the carrier for running broadband lines past a house].
Behind that, we are now coming out with our fiber-to-the-node architecture. We offer-albeit now in limited areas because we are just now beginning to build-the fastest public IPSL [Internet protocol subscriber line] service in the country-in fact, in North America, at 20M bps. We also offer a 12M bps product.
In the areas where it is available, sales activity is well ahead of where we expected the service to be. We couldn’t be more pleased with the uptake in that service. I think people are really looking at and recognizing the advantage of high-speed DSL architecture versus cable modem architecture.
It seems there’s not another carrier with as much rural area to cover as Qwest. Do you feel like Qwest starts with one strike against it when it comes to broadband coverage?
If you look at Qwest territories, there is a belief that it is extremely rural. The reality is we’re not as rural as people may think we are. Yes, we serve 14 states that are wide open, but if you really look at the areas inside those 14 states, they are really some dense metropolitan areas. So, I think our percent of rural is not that different than some of our peer incumbent traditional carriers.
Clearly the fundamental financials would say it’s more cost effective to build broadband-and certainly extreme broadband speeds-in the denser areas. But we’re not Southeast Asia, we are not parts of Europe in terms of densities where everyone lives in an MDU [multiple dwelling unit].
Triple Play of Voice, Data, TV
Is it critical for Qwest to have a triple play of voice, data and television?
From a Qwest perspective, we do not believe it is necessary to build your own head-end infrastructure and to create content deals in order to deliver a service that looks a lot like a cable service. Qwest believes fundamentally as a company we are going to embrace partnerships.
We have a wonderful partnership with DirecTV. However, as DirecTV evolves, they are also starting to incorporate video-on-demand on their higher-end set tops, particularly the high-definition TV accounts where they have an Ethernet interface. We are doing the same thing. We are really starting to enable a video model that is going to start leveraging the Internet.
You look at the Internet as really becoming the ultimate open-delivery network for video. I’m talking about video-on-demand in the much broader sense. For carriers today, when they have video-on-demand, it is whatever content I say you can get at, and it’s still a relatively limited library.
You look at this and compare it to what happened to Web browsing. When the Internet started with the original Mosaic, the number of Web sites available was quite limited.
What the Internet did was basically create a model where anyone could share content. I think that trend is going to happen here in video.
Picture a future where instead of putting up a Web site, I can put up the equivalent of a sort of Internet TV station, and that can be available anywhere globally. We’re betting on the Internet, and we think in five to 10 years there will be no question that the Internet will be the dominant delivery mechanism for video content.
What about your wireless plans?
It’s really the same story as video. Qwest does not believe that we have to build everything ourselves in order to offer a best-in-class service. We have announced a partnership with Verizon Wireless and we will basically put Verizon Wireless on the equivalent of our store shelf, as we put DirecTV there.
Can you tell us about your new qHome service?
What we’re doing is taking the [Microsoft] Windows Live and the Messenger framework and we’re integrating that with our traditional wireline infrastructure. So if you are a Qwest DSL customer and you have your Messenger client going, and you receive a phone call to your wireline phone, you’ll see a pop-up in Messenger.
By the way, if that individual leaves a voice mail, in addition to the traditional way of retrieving a voice mail, you will get that voice mail as an MP3 in an e-mail in your Windows Live account. You’ll also have full access to call logs and your other services.
So, it is really all about this idea of simplification and starting to tie services together. Now, that’s really just a first step, but think of how you can start to leverage that with the DirecTV partnership and the Verizon Wireless partnership.
It starts to tie all these services very nicely together in ways that others who even have the services themselves are not doing at this point.